Before the Open (Jun 20)

Posted on by Jason Leavitt

Good morning. Happy Friday. Happy Option Expiration day.
The Asian/Pacific markets closed mostly down. South Korea dropped 1.2%; Australia and New Zealand also dropped noticeably. Europe is currently trading mixed. London and Germany are up; Russia, Italy and France are down, but no market has moved much from its unchanged level. Futures here in the States point towards a down open for the cash market.

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So far this week’s gains have completely recaptured all of last week’s losses. Some indexes have are sitting at all-time highs; others are very close. The trend is obviously up. Unless you’re running $10B and have to scale in and out over several weeks, you should ride the trend and don’t worry about picking turning points. Yeah a top will be put in place eventually, and yeah I’ll personally lose a little money when it happens, but sitting tight and maintaining my long bias has made me a heck of a lot more money than I’ll lose when the market turns. And Besides, I don’t care much about the first 5% of a move anyways. I’m content to nail the bulk in the middle. Unless you’re a slick short term trader, you should be too.
I have felt like a broken record lately…telling everyone the trend is up, stick with it. If traders listen, great. If now, oh well. Nothing I can do. A lot of money is lost by being cynical and in denial. Everyone knows when you buy a stock at 50 and dump it at 49 you lost a point. But what about sitting on the sidelines when the market is in rally mode. If you do it once in a while, fine. Everyone does. I do. But there have been some who’ve been in a state of denial and mostly on the sidelines for five years. Ugh.
The dollar is up 0.10%. Oil is down, copper up. Gold and silver are down.
Stock headlines from barchart.com…
PetSmart (PETM -1.32%) was downgraded to ‘Neutral’ from ‘Outperform’ at Wedbush.
Darden Restaurants (DRI -0.40%) reported Q4 EPS of 84 cents, well below consensus of 94 cents.
Cimarex Energy (XEC -0.39%) will replace International Game (IGT +1.26%) in S&P 500 as today’s close.
Autonation (AN +0.44%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Molson Coors (TAP +0.91%) was upgraded to ‘Equal Weight’ from ‘Underweight’ at Morgan Stanley.
Kroger (KR +5.06%) was upgraded to ‘Neutral’ from ‘Sell’ at Goldman Sachs.
Raging Capital reported a 10.3% passive stake in 1-800-Flowers.com (FLWS -1.75%) .
AK Steel (AKS -2.11%) dropped 4% in after-hours trading after it lowered guidance on Q2 adjusted EPS to a loss of -6 cents to -2 cents, well below consensus of a 10 cent profit.
Gabelli reported a 5.74% stake in Hillshire Brands (HSH -0.16%) .
According to Bloomberg, Energy Transfer Equity (ETE -0.20%) is near a deal to acquire Targa Resources (TRGP +20.45%) and Targa Resources Partners (NGLS +17.74%) in a deal valued at a combined total of more than $15 billion.
Smith & Wesson (SWHC +1.01%) sank over 12% in after-hours trading after it reported Q4 EPS of 44 cents, higher than consensus of 39 cents, but then lowered guidance on fiscal 2015 GAAP EPS to $1.30-$1.40, below consensus of $1.45.
Family Dollar (FDO -0.12%) rose over 3% in after-hours trading after billionare investor Carl Icahn sent a letter to the company’s CEO urging an ‘immediate sale’ of the company.
Oracle (ORCL -0.70%) slid 7% in after-hours trading after it reported Q4 adjusted EPS of 92 cents, weaker than consensus of 95 cents, and then was downgraded by Citigroup to ‘Neutral’ from ‘Buy.’
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
10:00 Atlanta Fed’s Business Inflation Expectations
Notable earnings before today’s open: DRI, KMX
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jun 20)”

  1. Jason: “broken record.” Yeah, me too, but the trend is up. When it was down
    every day in the bad old days, it was depressing.
    Y’day, LOD 1952.25, and about an hour ago, they hit the futures target for that level, and futures have pulled back.
    On more than one OPEX I’ve seen a gap higher to hammer those SPX options holders on the wrong side of the trade who didn’t close out (SPX options expired yesterday at the bell, but the price of expiration is determined by the SPX’s value at the open today),
    only to be followed by a sell off the rest of the day.
    I can see them bringing it back down to Thurs’ close value, 1959 ish and going higher or even lower than that and bouncing. If they get below 1945, they’ll get my attention because it shouldn’t go there.
    Either way, it’ll be a gap up and eventually they’ll resume the move to 1969.
    Futures overnight: -2.0 to +5.25. At 9:15, +4.50

  2. “I have felt like a broken record lately…telling everyone the trend is up, stick with it.”
    I slightly disagree this time. I got a sell signal yesterday at the close. I suspect a few day pullback. I am taking profits on strength today if there is any. If not the trend is still up.

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